Funded

Luiciano

A loan of $1,075 helped rice Farming.

Luiciano's story

Luiciano was born and raised in Baba, Ecuador. He has worked in rice production since he was young, after learning from his father. He bought his land about 15 years ago. He depends on his rice production to feed and educate his two children who are 6 and 7 years old. He lives with his wife, children, his father and a sister. They all work together in the fields in order to cultivate rice. He will use the loan to invest in seeds, fertilizer and pesticides. He hopes he can improve his home and save for the future of his children.

Communal Banking in Baba

This borrower is part of the newest and largest Communal Bank in the recently developed Mifex Rural Finance Program. All of the members of the Centro Agricola de Baba Communal Bank are part of an Association of Rice Farmers in the county of Baba in rural Ecuador. Their association works cooperatively to cultivate rice and commercialize the product after it has grown. As an association, Centro Agricola helps the farmers by providing access to machinery and training services. The farmers from Centro Agricola have received special instruction on financial responsibility and accounting from Codemicro, an organization that specializes in training programs geared towards the rural sector.

The members of Centro Agricola de Baba will use the micro-loans to prepare their lands and cultivate rice on their farms. Because they form part of a communal bank, they are all each others' guarantors for the loan. This means that if for some reason one person in the group cannot fully repay the loan, the other borrowers and the Centro Agricola de Baba Association are responsible for the amount in default. The members of the bank also participate in a program designed to teach and encourage savings among the group. Promoting savings is often forgotten in many micro-finance programs, but Mifex believes that is imperative for the communities we works with to have capital reserved for future investments or unexpected difficulties.

Below is more information about Santa Lucia compiled by Luis Crespo and Robert Edgar of the Mifex team when evaluating the potential of the sector for the Rural Finance Program.

Economy of Baba

The people of Baba have been organized since the days of Gran Colombia when Ecuador was yet to be a country. The area has always been popular because of the extremely productive lands that gave way to cultivation of cacao for decades. Now Baba is a county in the province of Los Rios in the coastal region of Ecuador. For most of the latter part of the 20th Century it was a cacao and banana-producing sector. Most of the surrounding areas of Baba in Los Rios are owned by large multinational companies such as Dole, but Baba is a sector characterized by small and informal farms.

Rice production has now turned into the main economic activity of the sector as about 80% of the people are rice farmers. Cacao is still very popular in the area, but because of the long cultivation cycle people prefer to invest in rice. The lands in Baba are very fertile though, and most farmers in the sector often grow other crops, such as plantains and soybeans as secondary sources of income. Many farmers also keep livestock as emergency sources of food and income, commonly resorting to selling a chicken or pig if they are in need of cash.

Rice Farming in Baba

Most of the people in the Baba area are small farmers. They produce about 80 sacks of rice per hectare of land. In order to farm they first must prepare the lands by removing weeds, plowing and leveling the lands. This is the most difficult part for the farmers in Baba, who often lack the necessary machinery to properly plow the lands for rice production. After appropriately preparing the lands, the farmers fill an area with water to form what is known as a paddy field, because rice is a very water-intensive crop. The rice seeds are either dispersed freely (the process is known as boleo in Spanish) or hand sowed. Once the rice has grown, most farmers rent machinery that helps them gather their production.

Access to Credit

One of the biggest struggles in the area has been the lack of credit due to the absence of any type of financial institution.

Because people do not count on formal financial finance, they have turned to loan sharks for financing. They have been affected by expensive lines of credit that exceed 100% interest a year and can be as expensive as 240%. Intermediaries also exploit the farmers because of their outstanding debt. Farmers also lack skills and knowledge to commercialize their products and pay fair prices for their crops.

Risks

The largest risk in the sector is due to absence of watering systems. Although Baba is in the province “Los Rios” (the rivers) there is severe problem with access to water. The lack of infrastructure in the sector does not allow the small farmers to benefit from the presence of the many rivers in the area. If the winter season is too dry, it is likely that the lands will not be sufficiently fertile for rice production in the summer. On the other hand, if there is too much rain, there are not any drainage systems to prevent flooding and the crops are often ruined. Generally speaking though, Baba is a very productive sector where the lands yield all types of crops including rice, cacao, corn, watermelons, plantains, and soybeans.

Loan Use

The loans in this sector will mostly be used to buy soil, seeds, fertilizer and insecticides. Many clients will use the capital towards renting machinery and equipment necessary to effectively work and prepare the fields. Clients also typically use a part of the loan to buy livestock in order to raise and have as reserves. The loan repayment schedule is different from the typical micro-entrepreneur because farmers see the profits from their investments 5 or 6 months after making their initial expenditures. Mifex asks our rural clients only to pay 50% of the capital in the first 6 months of the loan. The rest of the debt must be paid in the seventh and final month.

Loan length/repayment term

The loan length or repayment term is the number of months it takes from the point that the loan is disbursed to the borrower to the point when the last repayment is due to be paid to Kiva lenders.

Repayment schedule

The loan's repayment schedule describes the frequency with which repayments on the loan. It can be any of the following:

Monthly - One repayment made per monthAt end of term - One repayment made at the end of the loan termIrregularly - Any other repayment schedule

To see a detailed repayment schedule for a loan, please click the "Repayment Schedule" link on the loan profile.

What is the disbursed date?

The disbursed date indicates the date that the borrower receives their loan funds. Loan disbursal for loans on Kiva can happen anywhere from 30 days before to 90 days after the loan is posted on the Kiva website. Direct loans are always post-disbursed, and will be done only after the loan has fully fundraised on Kiva.

In the case of partner loans, many of Kiva's Field Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Field Partners assume the risk that, if the loan isn't funded by Kiva lenders, the Field Partner has to fund the loan without any funds from Kiva lenders.

If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Field Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.

What is currency exchange loss and how could it affect my Kiva loans?

When lending funds across national boundaries, the local currency in the Field Partner's country of operation may lose some of its value relative to the USD, thus requiring the Field Partner to use more of its local currency to reimburse Kiva in USD. Kiva offers Field Partners the option to protect themselves against severe currency fluctuations (a US dollar appreciation of over 10% relative to the local currency) by sharing any losses greater than 10% with Kiva lenders. By bearing these losses, lenders are able to protect the Field Partner and its borrowers from catastrophic currency devaluations.

The Field Partner-specified currency exchange loss to lenders can be one of three values: Covered, Possible, or N/A.

Covered: The Field Partner has opted to cover any losses on the loan that are due to currency fluctuation. Lenders will not bear losses due to currency fluctuation.

Possible: The Field Partner has opted not to cover losses on the loan that are due to currency fluctuation. In this situation, lenders face additional risk because they will bear losses greater than 10%.

N/A: The Field Partner disburses loans to borrowers in USD so their loans are not subject to any foreign currency conversion.

Do Kiva borrowers pay any interest on their loans?

Yes, most borrowers on Kiva do pay interest to Kiva’s local Field Partners in some form. Kiva and Kiva lenders do not receive interest on Kiva loans.

Field Partners collect interest from borrowers because there are many expenses associated with providing small loans in developing markets, especially in rural areas. Many of Kiva’s Field Partners also provide additional services with loans, including training, financial literacy classes or health services.

Kiva will not partner with an organization that charges unreasonable interest rates, and we require Field Partners to fully disclose their rates. Kiva only partners with organizations and microfinance institutions that have a social mission to serve the poor, unbanked and underserved.

There are some 0% interest loans on Kiva, including all direct loans, which are loans that are not made through a Field Partner.
To learn more about the interest rates Kiva borrowers pay, look at the "Average cost to borrower" field.

What is a risk rating?

There are many levels of risk associated with Kiva loans, which are explained on our website here: kiva.org/about/risk

The Field Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Field Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information. Note that Field Partners with Kiva’s lowest credit tier undergo a lighter level of due diligence and hence do not receive a risk rating; instead, in places where a risk rating would normally appear on Kiva’s website, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Field Partner?"

Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.

How are loans facilitated?

Kiva loans are facilitated through 2 models, partner and direct, that enable us to reach the greatest number of people around the world.

For partner loans, borrowers apply to a local Field Partner, which manages the loan on the ground. Field Partners are responsible for screening borrowers, disbursing loans, posting borrowers to the Kiva website for funding, collecting repayments and otherwise administering Kiva loans on the ground to borrowers.

For direct loans, borrowers apply through the Kiva website and may or may not be endorsed by a Trustee. Unlike Field Partners, Trustees don't handle any financial transactions or have any duty to repay loans on behalf of their borrowers. Instead, Trustees take the role of providing support and business advice to their borrowers throughout the term of the loan.

More information about successive and concurrent loans

Field Partners often work with borrowers over time to help them build credit and expand their businesses. In order to make it easier for partners to post loans for borrowers who have been listed on Kiva before, we allow some partners the ability to relist a loan without having to re-enter all of the borrower's information. When this occurs, you'll see an updated loan description, as well as excerpts of the original descriptions from an earlier loan.

Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Field Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.

Field Partner's time on Kiva

Time on Kiva shows the number of months a Field Partner has been posting loans to Kiva for funding.

Kiva borrowers (partner loans)

This figure represents the total number of borrowers posted by this Field Partner that have raised loans on Kiva. This number includes individual borrowers within any of this Field Partner's group loans.

Field Partner's total loans

Total loans indicates the total amount of loans this Field Partner has raised through the Kiva website. This excludes refunded loans.

Average cost to borrower (PY)

Although Kiva and its lenders don't charge interest or fees to borrowers, many of Kiva's Field Partners do charge borrowers in some form in order to make possible the long-term sustainability of their operations, reach and impact. For this specific Field Partner, Kiva displays portfolio yield (PY), which is equal to a Field Partner's financial earnings divided by its average loan portfolio outstanding during a given year. Currently, Kiva displays portfolio yield for most of its Field Partners that are microfinance institutions (MFIs). Portfolio yield applies to the institution as a whole, and thus is a proxy for cost to borrowers rather than a direct measurement. Kiva calculates portfolio yield directly from the most recently available financial statements of a Field Partner and compares this result with other publicly available sources of pricing information such as mixmarket.org and mftransparency.org.

What does "Profitability (Return on Assets)" mean?

"Return on Assets" is an indication of a Field Partner's profitability. It can also be an indicator of the long-term sustainability of an organization, as organizations consistently operating at a loss (those that have a negative return on assets) may not be able to sustain their operations over time.

Average loan size (% of per capita income)

A Field Partner's average loan size is expressed as a percentage of the country's gross national annual income per capita. Loans that are smaller (that is, as a lower percentage of gross national income per capita) are generally made to more economically disadvantaged populations. However, these same loans are generally more costly for the Field Partner to originate, disburse and collect.

Partner delinquency (arrears) rate

Kiva defines a partner's delinquency (arrears) rate as the amount of late payments divided by the total outstanding principal balance Kiva has with the Field Partner. Arrears can result from late repayments from Kiva borrowers as well as delayed payments from the Field Partner.

How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans

Loans at risk rate

The loans at risk rate refers to the percentage of Kiva loans being paid back by this Field Partner that are past due in repayment by at least 1 day. This delinquency can be due to either non-payment by Kiva borrowers or non-payment by the Field Partner itself.

Notes: - Many Field Partners do not yet have many ended loans due to their
short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator
of principal risk is "delinquency rate."- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 180 days prior and there have been no repayments reported to Kiva during this time. . Kiva typically processes defaults on a quarterly basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Field Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.

Field Partner currency exchange loss rate

Kiva calculates the Currency Exchange Loss Rate for its Field Partners as: Amount of Currency Exchange Loss / Total Loans.

What's a Field Partner?

Kiva is able to reach more borrowers and some of the most remote places in the world through our global network of Field Partners. These partners are local organizations working in communities to vet borrowers, disbursing loans, collecting repayments, provide services and otherwise administer Kiva loans on the ground to borrowers.
Our Field Partners are nonprofit organizations, microfinance institutions, schools, social enterprises and more. Many provide services with their loans, such as entrepreneurial training and literacy skills.Field Partners all share one thing in common: the desire to improve people’s lives through safe, fair access to credit.
You can see a list of our Field Partners here: kiva.org/partners

Loan length/repayment term

The loan length or repayment term is the number of months it takes from the point that the loan is disbursed to the borrower to the point when the last repayment is due to be paid to Kiva lenders.

Repayment schedule

The loan's repayment schedule describes the frequency with which repayments on the loan. It can be any of the following:

Monthly - One repayment made per monthAt end of term - One repayment made at the end of the loan termIrregularly - Any other repayment schedule

To see a detailed repayment schedule for a loan, please click the "Repayment Schedule" link on the loan profile.

What is the disbursed date?

The disbursed date indicates the date that the borrower receives their loan funds. Loan disbursal for loans on Kiva can happen anywhere from 30 days before to 90 days after the loan is posted on the Kiva website. Direct loans are always post-disbursed, and will be done only after the loan has fully fundraised on Kiva.

In the case of partner loans, many of Kiva's Field Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Field Partners assume the risk that, if the loan isn't funded by Kiva lenders, the Field Partner has to fund the loan without any funds from Kiva lenders.

If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Field Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.

What is currency exchange loss and how could it affect my Kiva loans?

When lending funds across national boundaries, the local currency in the Field Partner's country of operation may lose some of its value relative to the USD, thus requiring the Field Partner to use more of its local currency to reimburse Kiva in USD. Kiva offers Field Partners the option to protect themselves against severe currency fluctuations (a US dollar appreciation of over 10% relative to the local currency) by sharing any losses greater than 10% with Kiva lenders. By bearing these losses, lenders are able to protect the Field Partner and its borrowers from catastrophic currency devaluations.

The Field Partner-specified currency exchange loss to lenders can be one of three values: Covered, Possible, or N/A.

Covered: The Field Partner has opted to cover any losses on the loan that are due to currency fluctuation. Lenders will not bear losses due to currency fluctuation.

Possible: The Field Partner has opted not to cover losses on the loan that are due to currency fluctuation. In this situation, lenders face additional risk because they will bear losses greater than 10%.

N/A: The Field Partner disburses loans to borrowers in USD so their loans are not subject to any foreign currency conversion.

Do Kiva borrowers pay any interest on their loans?

Yes, most borrowers on Kiva do pay interest to Kiva’s local Field Partners in some form. Kiva and Kiva lenders do not receive interest on Kiva loans.

Field Partners collect interest from borrowers because there are many expenses associated with providing small loans in developing markets, especially in rural areas. Many of Kiva’s Field Partners also provide additional services with loans, including training, financial literacy classes or health services.

Kiva will not partner with an organization that charges unreasonable interest rates, and we require Field Partners to fully disclose their rates. Kiva only partners with organizations and microfinance institutions that have a social mission to serve the poor, unbanked and underserved.

There are some 0% interest loans on Kiva, including all direct loans, which are loans that are not made through a Field Partner.
To learn more about the interest rates Kiva borrowers pay, look at the "Average cost to borrower" field.

What is a risk rating?

There are many levels of risk associated with Kiva loans, which are explained on our website here: kiva.org/about/risk

The Field Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Field Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information. Note that Field Partners with Kiva’s lowest credit tier undergo a lighter level of due diligence and hence do not receive a risk rating; instead, in places where a risk rating would normally appear on Kiva’s website, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Field Partner?"

Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.

How are loans facilitated?

Kiva loans are facilitated through 2 models, partner and direct, that enable us to reach the greatest number of people around the world.

For partner loans, borrowers apply to a local Field Partner, which manages the loan on the ground. Field Partners are responsible for screening borrowers, disbursing loans, posting borrowers to the Kiva website for funding, collecting repayments and otherwise administering Kiva loans on the ground to borrowers.

For direct loans, borrowers apply through the Kiva website and may or may not be endorsed by a Trustee. Unlike Field Partners, Trustees don't handle any financial transactions or have any duty to repay loans on behalf of their borrowers. Instead, Trustees take the role of providing support and business advice to their borrowers throughout the term of the loan.

More information about successive and concurrent loans

Field Partners often work with borrowers over time to help them build credit and expand their businesses. In order to make it easier for partners to post loans for borrowers who have been listed on Kiva before, we allow some partners the ability to relist a loan without having to re-enter all of the borrower's information. When this occurs, you'll see an updated loan description, as well as excerpts of the original descriptions from an earlier loan.

Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Field Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.

Field Partner's time on Kiva

Time on Kiva shows the number of months a Field Partner has been posting loans to Kiva for funding.

Kiva borrowers (partner loans)

This figure represents the total number of borrowers posted by this Field Partner that have raised loans on Kiva. This number includes individual borrowers within any of this Field Partner's group loans.

Field Partner's total loans

Total loans indicates the total amount of loans this Field Partner has raised through the Kiva website. This excludes refunded loans.

Average cost to borrower (PY)

Although Kiva and its lenders don't charge interest or fees to borrowers, many of Kiva's Field Partners do charge borrowers in some form in order to make possible the long-term sustainability of their operations, reach and impact. For this specific Field Partner, Kiva displays portfolio yield (PY), which is equal to a Field Partner's financial earnings divided by its average loan portfolio outstanding during a given year. Currently, Kiva displays portfolio yield for most of its Field Partners that are microfinance institutions (MFIs). Portfolio yield applies to the institution as a whole, and thus is a proxy for cost to borrowers rather than a direct measurement. Kiva calculates portfolio yield directly from the most recently available financial statements of a Field Partner and compares this result with other publicly available sources of pricing information such as mixmarket.org and mftransparency.org.

What does "Profitability (Return on Assets)" mean?

"Return on Assets" is an indication of a Field Partner's profitability. It can also be an indicator of the long-term sustainability of an organization, as organizations consistently operating at a loss (those that have a negative return on assets) may not be able to sustain their operations over time.

Average loan size (% of per capita income)

A Field Partner's average loan size is expressed as a percentage of the country's gross national annual income per capita. Loans that are smaller (that is, as a lower percentage of gross national income per capita) are generally made to more economically disadvantaged populations. However, these same loans are generally more costly for the Field Partner to originate, disburse and collect.

Partner delinquency (arrears) rate

Kiva defines a partner's delinquency (arrears) rate as the amount of late payments divided by the total outstanding principal balance Kiva has with the Field Partner. Arrears can result from late repayments from Kiva borrowers as well as delayed payments from the Field Partner.

How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans

Loans at risk rate

The loans at risk rate refers to the percentage of Kiva loans being paid back by this Field Partner that are past due in repayment by at least 1 day. This delinquency can be due to either non-payment by Kiva borrowers or non-payment by the Field Partner itself.

Notes: - Many Field Partners do not yet have many ended loans due to their
short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator
of principal risk is "delinquency rate."- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 180 days prior and there have been no repayments reported to Kiva during this time. . Kiva typically processes defaults on a quarterly basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Field Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.

Field Partner currency exchange loss rate

Kiva calculates the Currency Exchange Loss Rate for its Field Partners as: Amount of Currency Exchange Loss / Total Loans.

What's a Field Partner?

Kiva is able to reach more borrowers and some of the most remote places in the world through our global network of Field Partners. These partners are local organizations working in communities to vet borrowers, disbursing loans, collecting repayments, provide services and otherwise administer Kiva loans on the ground to borrowers.
Our Field Partners are nonprofit organizations, microfinance institutions, schools, social enterprises and more. Many provide services with their loans, such as entrepreneurial training and literacy skills.Field Partners all share one thing in common: the desire to improve people’s lives through safe, fair access to credit.
You can see a list of our Field Partners here: kiva.org/partners

You cannot use your bonus to support this loan.

Bonus funds cannot be applied to loans with repayment terms over 21 months or with a Field Partner Risk rating below 3 stars. If you would like to lend to this borrower anyway, you will have to use your own money.